Investing Strategy
Account Location: Where to Hold Which Investments
Asset allocation decides what you own. Account location decides where you own it. Good location decisions can improve after-tax outcomes over time.
Why account location matters
- Different accounts have different tax treatment.
- Tax-inefficient assets can create avoidable drag in taxable accounts.
- Location strategy compounds benefits over long periods.
General placement framework
- Hold tax-inefficient income assets in tax-advantaged accounts.
- Place tax-efficient broad equity in taxable accounts when suitable.
- Reserve Roth space for high-growth long-term assets.
Practical move: Location strategy should complement allocation strategy, not override it.
Implementation steps
- Map current holdings by account type.
- Identify tax-inefficient mismatches.
- Transition gradually to a target location structure.
Track Account-Location Progress